Complete List of Shady Tactics used by Booking.com and others to deceive their customers [with examples]
Some of the biggest names in hotel booking websites just got caught and publicly called out for playing dirty mind games with their customers.
Third-party travel sites engage in shady marketing practices that confuse consumers. The latest data shows that 23% US travelers have reported being misled by the OTAs. And among them, half were charged extra fees, while others - lost their reservations.
Knowing that Booking.com and Expedia hold 95% of the current online travel market, there’s no way and need to stop booking through those sites. However, next time, you’d think twice before making that booking. Here’s all shady tactics used by travel giants to deceive you.
#1 Commissions & Margins
In the free world, nothing is free. Booking.com is a leading online travel agency, meaning it has the highest commission rates for hotels, at the same time pricing the hotels with a high margin for customers.
Depending on the agreement between an OTA and the particular hotel, your purchase pays the OTA’s bills at the end. This is a tricky part. Now, what you have to understand is that the smaller OTA is the lower the commission rates are, meaning the lower price you pay as the end customer.
This is what we are trying to explain. Radisson is a well-known hotel chain, and its properties are listed on all OTAs. Because Booking.com is much bigger than Agoda (Booking.com controls ~67%, Agoda only 1% of the market), commission rates highly depend on the OTA’s popularity. In this case, you can see that the same room (Overwater villa with a private pool) at Radisson is sold for over $7,000 on Booking.com, but significantly cheaper on Agoda (~$4,000).
#2 Uncompetitive market = one price fits all?
From the first example you can see that you’re the key-factor creating the duopoly (some might say monopoly) in the travel industry. And even if it’s not you who’s actually responsible, still, OTAs have played a lot of their customers to profit and eliminate any slight chance for a fair competition in the hotel industry.
Travel sites are a helpful way to choose a hotel at your desired destination. However, hotels do not profit from third-party website bookings that much as they profit from direct bookings. But there's a problem of not being able to compete with OTAs in any way.
1) OTAs forbid hotels to advertise the lower price.
OTAs aim to prohibit hotels from selling any rate that is lower than the one on their website - it becomes a "walk away" point in contract discussions with them, and there are several examples of threats made to hotels in this respect. This has the unintended consequence of preventing hotels from offering a lower price directly to consumers, despite the fact that when selling direct, they do not have to pay an enormous commission to the OTA. In this case, Booking.com dictates the rules and changes the hotel prices depending on the mood.
This suppresses fair pricing competition. While similar clauses have been prohibited in France and Germany, they remain in other countries, including the United Kingdom.
2) OTAs spend more than 50% of their revenue on marketing
This is the most basic example to showcase the marketing budgets. If you know for sure the hotel you wish to stay at, and you google it, to have the hotel’s official website appear in the sixth position is quite a big deal, actually. Some even smaller, unknown brand hotels pay that high commission rates they are left with a 5% marketing budget available, which puts them on the second or even third Google page.
And that’s how Booking.com and other OTAs get customers to book through their platforms instead of actually negotiating and booking directly with a hotel.
#3 Affiliate links and redirects
Get back to the basic law we’ve already told you about: in the free world, nothing is done for free. The internet is full of useful blogs where travelers explain their trips, suggest worth-visiting destinations, share travel tips and tricks. And there’s nothing wrong in reading and taking their advice.
But here’s something you might not know. This is the random blog, where a couple shares how to plan a trip, and here’s a section all about booking accommodation. They suggest using Booking.com as it has a great cancellation policy.
If you redirect through this blog post’s website to Booking.com, and browse on the same link, the prices will be higher than they are when accessing Booking.com through its main URL.
The reason is very simple. The main goal for writers is to earn money from their blog, meaning they can either get commissions through affiliate links inserted in their blog posts or accepting paid guest posts and doing advertisements. So, for bloggers participating in the affiliate program with the biggest OTAs is useful, as their audience redirects through their affiliate links to the OTA, and from every redirect the bloggers get paid. But because Booking.com and other travel sites don’t want to get lower commissions themselves, what they do is pretty awful. If the affiliate link is given to any blogger, the booking site increases the hotel prices and customers are scammed in a very simple yet legitimate way.
#4 Mobile VS. Desktop
In the world where you want the best for the lowest cost, there’s no room for manual checks. And if we already talked about different prices on each OTA, how would it be possible to check all those OTAs’ websites on desktop, plus on mobile?
Booking.com has a so-called “mobile-rate”, which basically means that booking a hotel through mobile is cheaper. But here’s the case - Booking.com doesn’t always tell you that. If you browse on desktop you will rarely be informed if the price on mobile is lower.
#5 Price depends on your currency
In our personal and professional opinion this is the most unethical and the most frustrating scam of all.
Expedia shares the bigger part of the travel market together with Booking.com. And even Expedia plays dirty when pricing hotels based on customers’ currency. While “travel experts” position this as an Expedia hack, we see it as a discrimination practice.
There are cases when if you browse in USD and later in EUR, you can actually save a significant amount of money. But then again - who has time to keep switching currencies like that every single time? Plus, no one guarantees that euro is the cheapest currency, sometimes British pound could also be an option, but you might not check it, and you’d give away too much money to the OTA in the end.
The biggest threat to OTAs
There's no way to avoid all these tactics at 100%. However, to prevent you from spending too much when it's not necessary, our team developed Ratepunk.
Directly on your browsing booking site, Ratepunk runs a live price comparison showing all available prices on the internet for that hotel you're looking at.
After you have booked your hotel, Ratepunk still monitors the price for those dates, and if there’s a sudden price drop, you get a notification. This way we aim to show people that even if they booked a hotel for a reasonably good price, there’s always a chance to even get it lower.
What do people like? Free things. And what do they like even more? Free money. So you get cash back after each stay no matter the provider you've booked the hotel through.
There are thousands of different websites offering hotel reviews and ratings. That's why we have RateScore - the only number you need. Because it is coded to take all this information from across the web and calculate a single rating.
When you browse any hotel and still have doubts about whether it's worth the money, you can simply turn on the “price tracking” toggle on the extension. Ratepunk will keep an eye on the prices and will notify you via email if the price drops or increases.
Leave a comment